Layla Zulfa
Following a period of significant legislative uncertainty that threatened to destabilize their business models, leading single-family rental (SFR) operators American Homes 4 Rent (AMH) and Invitation Homes have signaled a cautious return to growth. Recent earnings calls from both companies reveal a market poised for recovery, with investor confidence gradually returning now that key policy questions have been resolved. The removal of provisions within the 21st Century ROAD to Housing Act, which had the potential to severely restrict capital flows into the build-to-rent (BTR) industry, has paved the way for renewed investor interest and a measured increase in deal activity.
Executives from both AMH and Invitation Homes have publicly stated that the revised legislation is now viewed as supportive of their established business strategies and future expansion plans. However, a significant implication of the new bill, they suggest, will be the amplified challenges faced by smaller institutional investors. These entities often lack the extensive capital resources, broad market access, and sophisticated operational capabilities that are hallmarks of sector leaders like AMH and Invitation Homes.
Divergent Growth Strategies in a Stabilized Market
While both AMH and Invitation Homes stand to benefit from the reopening of capital markets, their distinct approaches to growth, acquisition, and development underscore two differing paths within the SFR sector. Understanding these nuances is crucial to appreciating their post-legislation strategies.
American Homes 4 Rent (AMH): A Shift Towards In-House Development
Founded in 2012, AMH initially relied heavily on acquiring homes through the Multiple Listing Service (MLS). However, over the past several years, the company has pivoted significantly towards its in-house development program, launched in 2017. This internal development arm is now the primary engine of AMH’s growth, supplemented by strategic partnerships with homebuilders and the selective acquisition of newly constructed rental communities.
To further align its operations with this evolving strategy and optimize capital allocation, AMH has been actively divesting older, acquired homes. In the last two fiscal quarters, the company reported selling 1,318 such homes, a notable increase from the 786 homes sold during the corresponding period in the previous year. This accelerated disposition of "non-core assets" reflects AMH’s strategic initiative to recycle capital from scattered-site, older properties into newer, purpose-built rental communities designed for efficiency and scalability. This proactive portfolio management aims to enhance operational efficiency and capitalize on the demand for modern rental housing.
Invitation Homes: A Foundation in Acquisitions, Embracing Development
Invitation Homes, in contrast, has historically operated primarily as an acquirer rather than a developer. Its core strategy has centered on acquiring single-family rental inventory through the purchase of purpose-built BTR communities or via forward-purchase agreements with builders. In recent times, however, the company has shown a preference for acquiring discounted, nearly completed homes from builders, which can be secured within a 60-to-90-day timeframe and offer more attractive immediate returns. These acquisitions are often in bulk, though Invitation Homes continues to acquire some scattered-site rental properties. The company has confirmed that its scattered-site strategy will persist post-legislation, as the ROAD Act permits continued partnerships with homebuilders for acquiring newly constructed scattered-site homes.
Beyond direct acquisitions, Invitation Homes has also established a presence in the lending sector, offering debt and construction financing programs to support BTR developers. Furthermore, the company provides third-party property and asset management services for SFR portfolios. A significant recent development in its strategy was the January acquisition of ResiBuilt for $89 million. This strategic move provided Invitation Homes with an in-house development and general contracting platform, which management intends to expand significantly. While Invitation Homes continues its historical reliance on acquisitions and builder partnerships, the ResiBuilt acquisition signals a deliberate and growing foray into in-house development capabilities.
The Reopening of Capital Channels: A Measured Flow
From the perspective of Invitation Homes, deal flow experienced a considerable slowdown in the first half of the year, largely attributable to the prevailing legislative uncertainty. The passage of the housing bill has now led to an increase in sellers entering the market, creating new opportunities for operators. However, executives caution that capital is not flooding back instantaneously; rather, it is a gradual process of market recalibration.
Scott Eisen, Chief Investment Officer at Invitation Homes, noted during a Q2 2026 earnings call on July 30th, "For the first six months of the year, things were really quiet just because people were waiting to see where the legislation turned out. Now that the act has been passed, we’re seeing capital start to open up again and start to test the waters and see where the market is."
Dallas Tanner, President and CEO of Invitation Homes, echoed this sentiment, stating, "It definitely froze capital. I don’t want to give the impression that capital is thawed, but it’s starting to poke its eyes up and sort of say, ‘Okay, how can we participate in this sector? How could we be meaningfully committed to creating new supply?’"
The timing of Invitation Homes’ acquisition of ResiBuilt, which occurred shortly before the legislative uncertainty peaked, meant that the anticipated contributions from its nascent in-house development program were somewhat delayed. While the long-term development strategy remains intact, the near-term disruptions coincided with the integration of ResiBuilt.
"Projects that were in flight continued, but there were a number of projects that were scheduled to start in the first half that were delayed, and in some cases even canceled," explained Jon Olsen, CFO of Invitation Homes. "We’re going to have a little bit of a shortfall that we want to try to overcome there. The good news is the team is doing a really great job of refilling that pipeline now that the uncertainty overhang has been removed."
Invitation Homes’ lending business has also seen a resurgence in recent weeks following the passage of the 21st Century ROAD to Housing Act. "Similar to what we’re seeing on the acquisition side, since clarity has been realized, there’s a lot more interest and inbound activity," Olsen added.
Executives at AMH reported similar observations, acknowledging that while deal activity is returning to the BTR sector, the industry is still in a phase of recovery and catch-up. Bryan Smith, CEO of AMH, commented on the company’s Q2 2026 earnings call on July 31st, "There were a couple of deals that closed in January, and then it really was in a little bit of a wait-and-see. Post-legislation, we’ve seen a little bit more activity. There are some deals that are coming. We’re talking to some owners."
The ROAD Act’s Impact on Smaller Operators and the Specter of Consolidation
From AMH’s perspective, the final version of the ROAD Act offers significant protection for its core business model, which focuses on expansion through its development program and the consolidation of SFR portfolios. "On the other hand, it affects the growth opportunities for some of the other smaller companies that are relying on MLS purchases. These additional regulations are going to make that more difficult," Smith elaborated.
Smith posited that the legislation’s final form could create hurdles for smaller operators dependent on acquiring individual homes through the MLS. This increased difficulty, he suggested, might prompt some to divest their portfolios, potentially creating acquisition opportunities for larger, scaled operators such as AMH and Invitation Homes. This dynamic could mirror the ongoing consolidation trend observed within the for-sale homebuilding sector.
The firms most likely to be affected are those described as "in-betweeners"—companies that own more than 350 homes but lack the substantial scale and capital access of the major institutional operators.
Invitation Homes shares this outlook, anticipating an increase in market consolidation as smaller, capital-constrained operators seek strategic partners or outright buyers. This trend, they believe, will present opportunities for larger players to expand their market share. "We believe there’ll be an evolution here where you’ll see more consolidation. Particularly, you’ll see a lot more of it around BTR," Tanner stated.
In a recent LinkedIn post, rental economist Jay Parsons highlighted that while the final legislation largely safeguards the BTR market, "less-than-ideal edge cases" may persist for smaller institutional owners, potentially constraining their ability to sell BTR assets to larger institutional buyers. Parsons argued that this scenario could further exacerbate the disparity between well-capitalized, scaled operators and smaller firms searching for strategic alliances or an exit strategy.
Fee-Building Opportunities and a More Balanced Market
Both AMH and Invitation Homes, through their respective development programs, are identifying fee-building opportunities as a strategic growth area. Fee building involves a developer engaging a builder to manage the construction process for a pre-agreed fee. This model is particularly relevant now, given both companies’ increasing involvement in home construction. The recent legislative landscape, which may necessitate a greater reliance on new construction for rental housing, could further amplify demand for experienced SFR developers.
"Fee building is going to continue to be a big part of our strategy going forward. That is a very accretive, profitable business, and the ResiBuilt team is exceptionally good at that," confirmed Olsen.
The Near-Term Outlook for Build-to-Rent
With the immediate policy threat now diffused, Invitation Homes anticipates a strengthening of market fundamentals. This is expected to occur as the pace of new housing supply moderates and the supply-demand balance improves in previously oversupplied markets. Key among these are Sun Belt markets such as San Antonio, Austin, Dallas-Fort Worth, and Phoenix, which have experienced negative rent growth over the past year due to an influx of new construction. While some excess supply persists, particularly in the Sun Belt, Invitation Homes executives are optimistic that the market is trending in a more favorable direction.
AMH projects that rent growth will remain moderate for the remainder of the year. The company forecasts blended rent growth in the low-2% range, with new lease growth remaining roughly flat and occupancy rates staying strong, consistently above 95% for the full year. Lincoln Palmer, COO at AMH, pointed to improving supply conditions as a key factor that will position the company’s portfolio for enhanced performance heading into the next fiscal year. "We’re seeing this demand set against a modestly improving supply picture. That’s encouraging given what we were hoping for at the beginning of the year," Palmer stated, noting observed improvements in supply and a sustained level of tenant interest competing for limited inventory. This suggests a market recalibrating towards a more sustainable equilibrium after a period of significant external pressure.
